OPEC states fail to reach deal on output
Member states of the Organization of Petroleum Exporting Countries (OPEC) on Thursday failed to reach an agreement on measures to influence crude supplies and prices.
Nevertheless, OPEC ministers emphasized at the end of their meeting in Vienna that they were satisfied that prices had shown a moderate degree of recovery.
The ministers in their final statement at the end of their meeting made clear that they had not set a new output target for the Organization.
The statement said that since OPEC’s last meeting in December, "crude oil prices have risen by more than 80 percent, supply and demand is converging and oil and producer stock levels in the OECD have recently shown moderation."
For decades, OPEC was able to regulate prices by throttling or increasing production. However, attempts to impose production ceilings have foundered over recent years, with countries ignoring them and producing as much as they wanted or could. And with outside players like the US and Russia increasing their market share, recent meetings have failed to re-impose unity.
Crude prices have rebounded from their January lows of under $30, and last week briefly pushed past $50 a barrel for the first time this year.
Lately, Saudi Arabia had suggested a production freeze at current output levels to help boost the prices. The Saudi proposal overlooked the fact that there is already up to 2.5 million barrels per day of excess oil in the market.
Not all OPEC members have been supportive of Saudi Arabia’s plan. Iran’s Oil Minister Bijan Zangeneh emphasized again on Thursday that will continue to ramp up oil production until it returns to levels before sanctions cut its exports.
Zangeneh said a return to individual producer output quotas is the only way to manage the oil market.
“We need to have a country quota but I don’t believe it will happen at this meeting,” he said, adding the meeting would focus on choosing a new OPEC secretary general.
Zangeneh said Iran’s production has risen above 3.8 million barrels a day and is quickly approaching 4 million.
He said Iran's oil exports have doubled since the last OPEC meeting in December to about 2.023 million bpd in May.
“A doubling of exports of Iranian oil has had no negative impact on the market and has been absorbed well,” Zangeneh said.
“It is encouraging that the oil market is returning to a balanced state despite some sabotage carried out in this period,” he added.
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